Guojin Mintui: The Global Recession and Changing State-Economy Relations in China

Abstract

Following several decades of deregulation and a rising chorus for reducing the role of government in the economy, the global crisis from 2008 to 2009 saw governments throughout the world abandon ideological scruples and vigorously insert themselves into the economy on a scale that was unimaginable prior to the crisis’ onset. As a result of its massive interventions in the economy, the US federal government had by 2009 become the nation’s biggest automaker, banker, and insurer. These and other developments have reconfirmed that, when all else fails, the government is the ultimate risk manager in the United States.² Even The Economist, which is not known for favoring a large state, wrote that “more government can be good” and expressed relief that “politicians stepped in to bail out the banks, since the risks of tumbling into a depression were large.”³

The year 2009 was the most difficult year for our country’s economic development since the beginning of the new century … In these unusually difficult circumstances, the people of all our ethnic groups fortified their confidence, tackled difficulties head on, worked tenaciously, and responded calmly to the impact of the global crisis under the firm leadership of the Communist Party of China (CPC) … We took another steady step along the path of building a moderately prosperous society in all respects. Events again proved that no difficulties or obstacles can impede the course of the great rejuvenation of the Chinese nation.

Wen Jiabao, premier of the State Council Government Work Report to NPC, March 2010¹